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Bombardier Raises Cost Estimates For CSeries Program By $1 Billion

Delays lead to cost increases, meanwhile Bombardier plans to begin full fly-by-wire flights of the aircraft

According to the Toronto Star (Lu), Bombardier raised its CSeries cost estimate to $US 4.4 billion, up $US 1 billion from its original estimate. The aircraft manufacturer was quoted as saying the increase is due to a series of delays. The article reported that the company said its earnings before interest and taxes in its aerospace division would be about 5% of revenue this year, down 1% specifically due to costs surrounding the CSeries program. The article also noted that company CEO Pierre Beaudoin said that only 100 flight-test hours out of a planned 2400 had been logged to date.

The Toronto Globe and Mail (Marotte) reported Bombardier’s situation was due to “added development costs of about $750 million and interest charges of about $300 million to the CSeries.” The article also quoted Beaudoin as saying “We remain confident that we have a good business case for the CSeries,” and that the company can absorb the additional costs. Last month, Bombardier announced the layoff of 1700 employees across all operations of its aerospace division as it seeks to cut costs, according to the article.

The Montreal Gazette (Shalom) reported that the original cost estimate from Feb. 2004 for the program was $CDN 1.5 to $CDN 2, including the engine.

In related news, Aviation Week (Warwick, Croft) reported that starting in March, Bombardier will start “full fly-by-wire flights” of the CSeries plane. “The CSeries is Bombardier’s first fly-by-wire aircraft, and the company is moving cautiously…. The company plans to fly each aircraft 30 hours in February, 35 hours in March and 40 hours in April.

“We need that level of hours to meet the certification schedule,” the article quoted Rob Dewar, vice president and general manager for CSeries, as saying.